News Column

COMSTOCK MINING INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Financial Statements and Exhibits

February 14, 2014



Item 1.01. Entry into a Material Definitive Agreement. On February 11, 2014, the Comstock Mining Inc. (the "Company" or "Comstock Mining") and its wholly-owned subsidiary, Comstock Mining LLC (the "Subsidiary") entered into a $5 million revolving credit facility (the "Revolving Credit Facility") with Auramet International, LLC("Auramet"), pursuant to which the Company may borrow up to $5 million outstanding at any one time. The Company's and the Subsidiary's obligations under the Revolving Credit Facility are secured by a security interest in certain real estate owned by the Company within the Company's starter mine (the "Starter Mine Patents") and other personal property. The proceeds from the Revolving Credit Facility will be used for working capital and capital expenditures associated with current production ramp up. To secure the obligations under the Revolving Credit Facility, each of the Company and the Subsidiary have entered into Security Agreements with Auramet, each dated as of February 11, 2014 (the "Security Agreements"). The Company also entered into a Pledge Agreement with Auramet, dated as of February 11, 2014 (the "Pledge Agreement"), pursuant to which the Company pledged all of its interests in the Subsidiary to further secure its obligations under the Revolving Credit Facility, and a Deed of Trust, dated as of February 11, 2014 (the "Deed of Trust") on the Starter Mine Patents as security. In connection with entry into the Revolving Credit Facility, the Company and the Subsidiary have also entered into an amended and restated purchase and sale agreement, dated as of February 11, 2014 (the "Master Purchase and Sale Agreement") with Auramet Trading, LLC ("Agent"), the terms of which will govern all transactions of metals between Agent and the Company. The Revolving Credit Facility, the Security Agreements, the Pledge Agreement, the Deed of Trust and the Master Purchase and Sale Agreement are collectively referred to herein as the "Auramet Loan Documents." The Company closed the transactions contemplated in the Auramet Loan Documents on February 11, 2014, and drew down approximately $4.6 million thereunder on February 12, 2014. The Revolving Credit Facility will be repaid through 14 semimonthly cash payments of $357,143 beginning August 8, 2014, and ending February 6, 2015, with total principal and interest obligations not exceeding $5million. The Company is permitted to redraw amounts borrowed and repaid in minimum increments of $1,000,000 on or prior to October 6, 2014. Borrowings under the Revolving Credit Facility bear interest at 9.5% per annum. The foregoing description of the Auramet Loan Documents do not purport to be complete and are qualified in their entirety by reference to such agreements (excluding the Deed of Trust), which are filed herewith as exhibits. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information disclosed in Item 1.01 of this Form 8-K relating to the Auramet Loan Documents is incorporated into this Item 2.03. Item 3.02 Unregistered Sales of Equity Securities. In connection with the Revolving Credit Facility, the Company issued 137,105 shares of the Company's common stock to Auramet to as closing, structuring and arrangement fees related to the Revolving Credit Facility.

-------------------------------------------------------------------------------- Item 9.01 Financial Statements and Exhibits. d) Exhibits. Exhibit Description Number 10.1 Secured Promissory Note and Guaranty 10.2 Pledge Agreement 10.3 Security Agreement (Comstock Mining Inc.) 10.4 Security Agreement (Comstock Mining LLC) 10.5 Amended and Restated Purchase and Sale Agreement 99.1 Press release 2



--------------------------------------------------------------------------------


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools